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Committee in regard to which that committee will report to the Association.

The following matters have come before the committee for attention during the past year:

1. Complaints against members of the Bar in different states. This committee has no jurisdiction to act on such complaints, and the Chairman has, therefore, transmitted each complaint to the Grievance Committee of the particular state or local bar association having jurisdiction.

2. Complaints against the judiciary. This committee has no jurisdiction under the by-laws to act on such complaints and they have been referred accordingly to the Executive Committee. It should be noted, in this connection, (a) that the Association has adopted canons of ethics for the Bar, but not for the Bench; (b) that the suggestion made by the Association on recommendation of this committee in 1917 that the propriety of the formulation and promulgation of canons for the judiciary should be considered by the judiciary section of this Association, was entirely ignored by that section in 1918. In regard to the duty and expediency of action by the Association as a whole with reference to the matter of judicial scandals, there is a difference of opinion among the members of the Association. It is clear, however, that under the by-laws this committee is not authorized to take action on behalf of the Association. The power conferred upon this committee by the by-laws to make recommendations on the subject has already been exercised by the recommendation made and adopted by the Association in 1917, referring the matter of canons for the judiciary to the judiciary section. It seems useless to repeat a recommendation which the Association has already indorsed.

For the purpose of obtaining information from the state bar associations, the committee sent out the following circular letter dated February 23, 1921, to the Secretary of each state bar association :

February 23, 1921. This committee hopes that each state bar association will follow the example of the New York County Lawyers' association and the Chicago Bar Association in appointing a committee to which questions on legal ethics may be submitted. If such a committee is already in existence, this committee hopes that it will take active steps to invite the submission of such questions.

This committee further requests that your association will assist it: 1. By sending to this committee all such questions, answers, and reports on the subject of ethics and grievances.

2. By advising this committee of any action taken with reference to the discipline of members of the Bar in your state.

Your active co-operation in this matter is earnestly solicited.

In many cases this letter was unanswered, and very little information has been received in reply.

The committee has received various inquiries with regard to the application and interpretation of the Canons of Ethics. The committee is not authorized to give opinions on such matters on behalf of the Association. In some states committees are authorized to answer such inquiries, and the New York County Lawyers' Association has given many opinions on such questions. The American Bar Association has adopted Canons of Ethics purporting to represent the views of the members of this Association. The interpretation of such canons is left to the different state jurisdictions. In other words, the Association lays down rules for the guidance of its members, and provides no authority for the interpretation of those rules.

The recent development of trade associations and their growing importance, raises new questions of legal ethics. Some of these questions have been considered by the New York County Lawyers' Association, and its recommendations therein are contained in an appendix to this report.

RECOMMENDATIONS. The committee recommends:

1. That for the purpose of preserving information which this committee may collect from year to year, the Chairman of the committee be instructed to transmit to the Secretary of the Association any letters or documents which may be of permanent value.

2. That the Representatives of the American Bar Association to the Conference of Association Delegates be requested to take. up with the Conference the subject of providing for the uniform interpretation and administration of the Association's Canons of Ethics throughout the United States and to report to this Association upon the matter.

3. That this committee be authorized to co-operate with the Committee on Commerce, Trade and Commercial Law in the preparation of rules governing the subject of Professional Ethics in Relation to Trade Associations.






This committee appointed a sub-committee to co-operate with a similar sub-committee of the Committee on Unlawful Practice of the Law to consider the relations of lawyers and lawful trade organizations.

The joint sub-committees held a series of hearings and conferences with those especially interested in the subject. The two committees then held joint conferences. After prolonged consideration of the subject and of the cognate subject of the relations of lawyers and collection agencies, this committee has reached its conclusions as follows:

The committee is of the opinion that it should confine itself to the consideration of the propriety of the conduct of the lawyer or of the relation of the lawyer to the organization and the relation of the organization to the lawyer. The committee does not assume to construe existing statute law.

In its opinion (independent of any prohibition imposed by statute) there is no inherent impropriety, professional or otherwise, in the establishment and maintenance of the following relations between a lawyer and a trade organization existing for the benefit of its members:

(1) A lawyer may without professional impropriety, accept employment and compensation from such association, acting as agent for a member, to render professional services in behalf of such member (for example, in making collections or in connection with insolvencies or bankruptcies), though the association has urged its members to refer to its matters involving their common interest, for representation or for such service, provided, however, that the lawyer be careful to avoid assuming inconsistent professional obligations. He should regard and treat the member as his client; and he should not compensate the Association por divide his compensation with it. The committee assumes that the solicitation of such claims by the Association is for the common advantage of its members and the common end. In the opinion of the committee the employment of a lawyer to promote this common interest as above indicated contains no element of inherent professional impropriety.

But, as usually conducted, a collection agency exists for its own profit, is an independent contractor, does not exist for co-operative purposes, and solicits business for its own ends, though it doubtless promotes the interests of its customers or it could not exist. When in behalf of a customer it acts as his agent and transmits a claim or employs a lawyer, such employment, in the interest or on behalf of its customer, is not, in the opinion of the committee inherently improper, provided it is free from divided allegiance or inconsistent obligation, and provided it is not permitted to deprive the lawyer of the untrammeled relation of fidelity to the customer, which is of the essence of professional duty. Since the interests of the collection agency, unlike those of the trade organization, are not identical with the interests of those whom it undertakes to represent, its solicitation of business is for its own ends; while it may properly employ a lawyer as its own adviser, and to represent it, in the opinion of the committee, the employment by it in its own behalf, of a lawyer to represent its customers, is the exploitation

of his services for its profit, as an intermediary between client and attorney; and this the committee has always regarded as not professionally proper (whether or not prohibited by statute); for the reason that the exploitation of the office of the lawyer for the profit of another is an abuse of its functions, the solicitation of business for the common advantage of the agency and the lawyer is solicitation for the lawyer, and the obligation to the agency should not be permitted to supersede or interfere with the primary obligation to its customer.

The same principles which apply to the conduct of the lawyer for the trade organization of course apply to the conduct of the lawyer for the collection agency.

Upon the same principles which apply to trade organizations, a lawyer if not prohibited by statute may in the opinion of the committee, without professional impropriety accept employment and pay from associations of employees, or employers or any other body of persons having common or similar interests, organized and employing the lawyer for the promotion of such interests.





To the American Bar Association:

The Committee on Commerce, Trade and Commercial Law reports as follows:

I. SUMMARY OF RECOMMENDATIONS. The following is a summary of the recommendations of the committee:

First.-That a resolution be adopted declaring the American Bar Association, at least so far as concerns its recommendation as to legislation affecting American social and economic affairs, is å quasi-public association and that the proceedings of its committees in formulating laws affecting social and economic conditions and the administration thereof and of the legal standards therein set forth to be administered by courts and administrative bodies, should not be held in star chamber, but should be open to the public and public notice should be given of the subjects to be considered and full public hearings had thereon and reasoned reports of the committees thereon be submitted to the association for discussion and action thereon.

Second.-That the Association adopt a resolution as a fundamental proposition that the law merchant should be brought into harmony with the actual usages, customs and practices of business, provided the same are (1) ethical and (2) desirable in the public interest.

Third.—That the Association adopt a resolution that the statement of Elihu Root in his annual address in 1916 is fundamental as a guide in matters pertaining to legislation as to administrative bodies as follows:

There is one special field of law development which has manifestly become inevitable. We are entering upon the creation of a body of administrative law quite different in its machinery, its remedies, and its necessary safeguards from the old methods of regulation by specific statutes enforced by the courts. As any community passes from simple to complex conditions the only way in which government can deal with the increased burdens thrown upon it is by the delegation of power to be exercised in detail by subordinate agents, subject to the control of

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